Bryan Cohen Mar. 20, 2014, 2:52pm
HARTFORD, Conn. (Legal Newsline) - Connecticut Attorney General George Jepsen and Consumer Counsel Elin Katz announced a proposed settlement on Tuesday with Aquarion Water Company that will refund approximately $29 million to Aquarion customers.
In September, the Internal Revenue Service issued final and re-proposed tangible property regulations, which allow businesses to change the way they determine how capital expenditures can be treated for federal tax purposes. The regulations also allow the companies to reach back for all taxes paid for a number of years.
The regulation change by the IRS will allow Aquarion to recover approximately $29 million for taxes paid since 2007.
Under the terms of the proposed settlement, Aquarion will provide a credit to its customers on water bills for the entire income tax refund. Aquarion agreed not to apply for a general rate increase to go into effect prior to October 2017 and agreed to delay its planned water infrastructure and conservation adjustment filing from April 1 to October 1.
"I commend Aquarion for coming forward to resolve this tax issue that was initially brought out last year in the company's rate proceeding," Jepsen said. "This resolution not only provides consumers sizable rate relief over the next three years, but will reduce income tax expenses in future rate cases. Ratepayers fund capital expenses, like infrastructure maintenance and repair, and ultimately ratepayers should be the beneficiaries of changes in federal regulations that lead to savings. This is an excellent settlement for Aquarion customers who will not only see a reduction to their bill but also will see stability in their water rates for the near future."
If the settlement is approved by the state Public Utilities Regulatory Authority, consumers would start receiving credits on their bills in January. Bills are expected to increase by approximately 5.6 percent.